Government looking at FDI by foreign airlines in Indian carriers

BANGALORE: The government is looking at allowing foreign airlines to invest in domestic carriers but there would be no change in FDI cap of 49 per cent, Civil Aviation Minister Ajit Singh said today.

"FDI is already allowed in airlines up to 49 per cent. We are not changing that 49 per cent," Singh told a press conference after a meeting of the consultative committee of his ministry, and a separate interaction with players of aerospace industry here.

"But what we are trying to do....right now other (foreign) airlines are not supposed to participate in the FDI (foreign airlines can't invest in Indian carriers)...We are trying to see if other airlines are also allowed to participate (in the FDI)," he said.

Singh argued the airlines business is a complicated one and only airlines would be interested in investing in other carriers.

He pointed out that Indian banks have "over-extended" themselves to airlines and they are not willing to giving more money to the sector.

To a question if Air India has approved a voluntary retirement scheme for 5,000 employees at a cost of Rs 800 crore, Singh said, "Air India has been looking at it and the Board approved it."

He said the VRS was not meant for engineers and pilots but for ground-handling and staff of that kind.